Investor Presentation “A New Beginning” October 2007
Investor Presentation
“A New Beginning”October 2007
THE COMPANY• ASX-listed oil and gas exploration company • Recent merger with K2 Energy• Tomahawk awarded IPO of the year when listed in 2005
CORE FOCUS AREA – OKFUSKEE COUNTY, OKLAHOMA• Low cost, uncomplicated drilling in conventional reservoirs • Multiple targets in each well i.e. 6-10 formations
SUCCESS ACHIEVED TO DATE• High exploration success rate• Large undeveloped reserves “behind pipe”
ACTIVITY SINCE MERGER COMPLETION• Best drilling results recently achieved• 5 wells drilled since merger – 5 discoveries
EXCITING EXPLORATION POTENTIAL• Aggressive exploration & development plan• Virgin 3D seismic coverage significantly upgrades potential • Over 20 targets generated• Targeting zones which have never been penetrated and should
produce at strong rates
THE COMPANY• Strong near term increase in production expected• Stock price now trading at all time low
A Brief Introduction…
Who Are Tomahawk Energy?
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• A$25mn market capitalization– Lowest share price since IPO– Focus post merger with Tomahawk has been on setting
the stage to deliver on operational performance– Time to tell the story – a good time to invest
• Cash reserves of A$6.4mn, and no debt(2)
– Should deliver Tomahawk though to self-funding status– Minimal risk of future dilution
• Top 20 shareholders control 42.7%– Loyal supporter base– Stake building over the past months
• Management controls 15.5% (20.1% diluted)(2)
– Motivated to deliver success
Share Register# %
Edwards Meadows Pty Limited 11,100,000 9.339
ANZ Nominees Limited 8,796,497 7.401
Golden Words Pty Ltd 4,320,958 3.635
Mr Ryan Michael Moynagh 3,157,576 2.657
Blazzed Pty Limited 2,550,000 2.145
Chaus Capital Pty Ltd 2,540,001 2.137
Aspen Energy Pty Limited 1,800,000 1.514
Balander Pty Limited 1,770,000 1.489
Ravenhill Investments Pty Ltd 1,560,000 1.313
Towertun Pty Ltd 1,550,000 1.304
Merrill Lynch (Australia) Nominees Pty Limited 1,543,473 1.299
Heenalu Pty Ltd 1,500,000 1.262
Your Care Pty Ltd 1,500,000 1.262
Arkkindale Pty Ltd 1,500,000 1.262
Mrs Michelle Doro Denny 1,045,000 0.879
ACAO Capital Pty Ltd 960,000 0.808
Mr Peter Tsu & Mr Sonny Berglund 900,000 0.757
Mr Ian Scott Robertson 900,000 0.757
Hyperion Capital Pty Limited 900,000 0.757
Moana Nominees Pty Limited 823,609 0.693TOTAL 50,717,114 42.670
Capital Structure (1)
-500,00031/12/08 Ex. 70 cents
29,997,50029,997,50030/09/09 Ex. 20 cents
12,298,00012,298,00031/12/08 Ex. 20 cents
ISSUED QUOTED
SHARES
Fully Paid 118,854,903 118,854,903
OPTIONS
31/12/08 Ex. 40 cents 2,000,000 -
(1) As of September 26th, 2007
(2) As of June 30th, 2007
Capital Structure & Share Register(1)
Who Are Tomahawk Energy?
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Sam has more than 35 years experience as a director of public and private companies. He graduated from Sydney University with a Bachelor of Economics. He has been a director and significant shareholder in a number of successful companies both public and private. .
Board of Directors – The Experience to Deliver
Who Are Tomahawk Energy?
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Peter was formerly a commercial lawyer and has
worked in the resource exploration industry since
1987, with his own geo-tech service companies. He has
wide commercial and investment experience in the
oil and gas exploration industry in the United States.
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Ken has enjoyed significant commercial success since
founding Electronic Banking Solutions Pty Ltd in 1998. As
Managing Director, Ken developed the business
before merging with Cash Card Australia Limited in
2003. Ken has been director of Cash Card Australia
Limited and is an investor in many successful businesses in Australia and elsewhere.
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Michael is a Certified Petroleum Geologist with the
American Association of Petroleum Geologists. He
has 24 years’ experience in oil and gas exploration and
investment, currently as President of Aspen Energy,
Inc, based in Louisville, Kentucky, USA. Mike has
overseen in excess of 350 oil and gas drilling ventures,
investing more than $50,000,000 over the past 10 years throughout the main oil and gas producing regions of
the USA. He has highly specialized expertise in
screening and evaluating drilling opportunities and in
managing oil and gas investments.
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In his 30 year career, Bob has worked in oil and gas
projects in the GOM, Offshore Atlantic Margin, and the North Slope of Alaska. In 1988, Bob became the senior advisor to the chief geologist
and general manager of exploration, worldwide. For 15 years, he held various positions including senior
exploration geophysicist with Sohio Petroleum (BP
subsidiary) in San Francisco. Since 1999, Bob has run a
successful consulting business based out of Ojai,
California and London, England.
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John has strong experience in general management of
resources and scientific companies. Most recently he
led the Geochemistry Division of an international
testing and verification business. He has been a
Director of Bank of Western Australia and at one time led the Stock Exchange in Perth.
He is now a Director of several private and public
companies involved in oil and mineral services. He was educated at University of
Western Australia in Accounting and Commercial
law.
• Unconventional gas focus• Flat to declining production• No “on-ground” USA management• No operational capabilities• Limited cash resources
Merger With K2 EnergyCorporate Transformation Complete
• Conventional gas focus• Growing production profile ��������������� �������������������������
• Excellent recent drilling results in both old THK portfolio and new ventures
• Recent discoveries will dramatically increase production
• Strong Board and management team with “on-ground” technical expertise
• Ample cash to explore and develop existing portfolio
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Merger With K2 EnergyTransaction Rationale
• K2 had solid management, good operational experience in the US, plus significant cash resources
• Tomahawk had a very prospective project but lacked the necessary financial strength and operational expertise
• Opportunity to lock-in tremendous shareholder value
– Deploy cash reserves towards bringing existing conventional gas discoveries on stream
– Drill numerous identified conventional drilling targets
– Enhance production and cash flow generation
– Evaluate discovered non-conventional resource
– Pursue new and other existing opportunities
• Australian oil & gas sector likely to undergo a major period of consolidation
– Survival of the fittest– First mover advantage– Scale ensures survival– Cash flow is key
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Operational OverviewAreas of Focus: Why & Where?
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Hidden Lake (Texas)
Shary (South Texas)
Alex (Texas)
Okfuskee County(Oklahoma)
Operational OverviewStrategic Direction
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2
WELL COMPLETIONS & WORKOVERS
EXPLORATION PROGRAM• Bad Creek
- 3D seismic targets- 8 well exploration program in progress- Highly promising results
• 100% success on first 3 Bad Creek wells- Priegel #1-10 (33.0%)- Patriot #1-15 (12.5%)- Patriot #2-15 (12.5%)- 4 well development program planned
• Other Wells- Gayle #1 (7.8%) 3-10 Bcf- Alex #1 (7.5%) 10-24 Bcf- Shary #1 (6.8%) 1Bcf – 100 Mcfd- Shary #2 (6.8%) 2Bcf – offset to be drilled updip
• In ����������!"#$% �����������������������������
• 20+ discoveries with “behind pipe” potential• 6-10 hydrocarbon zones• Extract value from conventional reservoirs• 12 well workover program currently underway
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• Gas development historically involved conventional drilling and completion
• Conventional gas reservoirs originally formed in sandstone and limestone formations
• Gas migrated upwards until trapped by geologic faults or folds, ultimately to reside in a reservoir rock until discovered, drilled, and produced
• Conventional plays are trap scenarios - as opposed to unconventional gas, which is deposited in continuous accumulations
• Gas shale reservoirs are generally composed of low-permeability, low-porosity matrix rock where the majority of gas is stored and a system of natural fractures that supply most of the transmissibility in the reservoir
• Shale can be hundreds of feet thick and cover millions of acres
What Are We After?
Operational Overview
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Operational Overview
• 12.5% in approximately 27,000 acres in the Okfuskee County, Oklahoma
• Outstanding exploration success rate to date
• 28 existing wells with “behind pipe” oil and gas potential from conventional reservoirs
• Average working interest of around 40%
• Recent 3D seismic survey over most of the discoveries
• Project area resources independently assessed
– Gaffney Cline : Net contingent resources 20-70 Bcf (best case: 45 Bcf )
– Schlumberger: 10-20 Bcf “behind pipe” (Only 14 wells analysed and only conventional resources potential)
• Despite a very high success rate for an average of at least 3 formations per well – Schlumberger have assumed 2 formations per well in its exploration assessment – hence their assessment good be viewed as conservative
• 10 high quality prospects identified for immediate drilling containing potential reserves of in excess of 20 Bcf
• 20 additional prospects in 3D area which may become drilling targets over the medium term
• Dual pronged strategy for capturing conventional and non-conventional prize
Dual Pronged Strategy
ConventionalOil & Gas
UnconventionalGas
Dual Pronged Exploration, Appraisal
and Development Strategy
Exploit Substantial Existing Infrastructure
to Accelerate Development
Develop conventional discoveries to
provide early cash flow potential, and explore recently 3D seismic delineated
prospects
Employ latest stimulation
technologies to exploit large scale
shale resource
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Operational Overview
Multiple Proven Target Formations Reduced Exploration Risk
Experienced Operators Reduced Completion Risk
Access to Extensive Infrastructure Rapid Path to Commercialisation & Revenue
Early Entrant Land Scramble Now On
Project Focussed Large Resource Potential Independently Determined by Gaffney Cline and Schlumberger
Large Prospect Inventory Acreage to Allow Drilling of up to 3 Wells a Month for 5 Years
The Ingredients for Success are There
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Operational OverviewBad Creek - Expanding Exploration Focus
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• 50 square mile proprietary 3D shoot
• 50% interest in 3,000 acres of target specific acreage
• 20 drill targets identified so far and expected to double
• First 3 wells all commercial and producing
• 8 new exploration wells planned over next 3-6 months with additional locations being developed
• 3 development wells planned in next few months for Patriot and Priegel discoveries
• New Schlumberger seismic interpretations reveal new Booch channel and Gilcrease channel targets as well as Woodford and Caney fracture anomalies to be tested
• Potential for in excess of 100 wells to be drilled in Bad Creek
• Engineer’s reports underway to develop prospect inventory and reserve estimates for all identified prospects
• Gathering systems, existing infrastructure and pipeline access means early cash flow from any discoveries
Unconventional Gas – Further Upside Potential
Why Explore Gas Shales?
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Horizontal wells are fast becoming the standard production technique
Expectation that continued development of technology will lead to further increases in
both reserves and production
Use all the latest leading edge technology to determine optimal completion techniques
Seismic surveys are essential for successful completion of horizontal wells
Shales are both hydrocarbon “Source and Reservoir” rocks Massive resource potential
Shales have both free gas and adsorbed gas. Patience in early flow rates increases
long term reserves
Low geological risk as existence of shales known for decades
Having strong technical “partners” is key to developing non-conventional gas Strong demand with high gas prices make
for robust project economics
Rapid lead times from drilling to sales revenue
Abundant infrastructure to support development
Caney & Woodford shales being touted as the “next Barnett shale”
Shallow targets with low cost of drilling & completion
Good potential for more shallow conventional zones
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Unconventional Gas – Further Upside Potential
• Natural gas is the fastest growing primary energy source in the United States
• Low permeability shale is the latest major source of natural gas to be developed
• Total shale-gas resources in the U.S. estimated between 500-600 Tcf
• Shale gas could provide up to 15% of the technically recoverable natural gas resources in the U.S. over the next 18 years
• 39,500 producing shale-gas wells in the U.S., with cumulative production of about 600 Bcf per year
• NYMEX natural gas futures currently hover around US$7
• Unconventional gas represents a major exploration and development play being pursued by many big name oil & gas companies
• Unconventional gas development is a technology story, and technology is constantly improving
Tomahawk Energy is positioned in “one of the recognisedunconventional gas plays in the United States” – Arkoma Basin
US Shale Play Heats Up
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Delivering SuccessNet Production & Cash Flow Growing Fast
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Behind pipe discoveries could
generate significant near-term
production levels
High level prospects
represent low-risk production
enhancement opportunities
Underutilisedregional
infrastructure allows rapid
commercialisation of new discoveries
Large inventory of follow-on targets will likely yield a high commercial
success rate
Cash flow self-sufficiency in anticipated in March 2008
Assumes no exploration
success from planned 8
exploration wells
THK will still have approx. A$5mn
and will be poised to aggressively pursue asset
development and production growth
Delivering SuccessForward Work Program
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Delivering SuccessValuation Implications
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NPV OF GAS RESERVES (US$/Mcf)
3.00 4.00 5.00
NET GAS RESERVES(Bcf)
5 0.11 0.15 0.18
10 0.22 0.29 0.36
15 0.33 0.44 0.55
20 0.44 0.58 0.75
25 0.55 0.73 0.91
30 0.66 0.88 1.09
35 0.77 1.02 1.28
40 0.88 1.17 1.46
45 0.99 1.31 1.64
50 1.09 1.46 1.82
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Delivering SuccessA Good Time to Invest
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2007 Q4
4 exploration wells2 development wells4-6 workover zones
2008
>10 exploration wells5 development wells>10 workover zones
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Upcoming ProgramUpcoming Program
• Foundations for growth firmly established since IPO
• Onshore USA focus• Oklahoma project will be growth engine• Strong reserve and production growth• Increasing free cash flow • Outstanding exploration success• Low cost drilling with high equity
positions• Large number of undeveloped
conventional oil & gas discoveries with demonstrable reserves and production growth potential
• Large undeveloped exploration portfolio• Further upside in unconventional gas
resources where Tomahawk was a pioneer in the Caney/Woodford play
• Solid cash position – no debt
Delivering SuccessBuilding a Successful E&P Company
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Delivering SuccessWhy Invest in Tomahawk?
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For more information or if you have any queries you can contact Tomahawk Energy at:
•Australia Office
Level 2, 27 Macquarie Place Sydney NSW 2000
Telephone: +61 (02) 9251 3311 Facsimile: +61 (02) 9251 6550
•US Office
161 St. Matthews AveSuite 16Louisville, KY 40207
Telephone: +1 502 897 9785 Facsimile: +1 502 897 1758
•Website
www.tomahawkenergy.com.au
Contact Us
Need More Information…
Thank You For Your Time
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Closing Thoughts…
• This presentation has been prepared by Tomahawk Energy Limited (the “Company”) and is being provided for the sole purpose of providing preliminary background financial and other information to enable shareholders to review the business activities of the Company. It is not intended as an offer, invitation, solicitation or recommendation with respect to the purchase or sale of any securities.
• This presentation should not be relied upon as a representation of any matter that a potential investor should consider in evaluating the Company. The Company and its respective directors, agents, officers or employees do not make any representation or warranty, express or implied, as to or endorsement of, the accuracy or completeness of any information, statements, representations or forecasts contained in this presentation, and they do not accept any liability for any statement made in, or omitted from, this presentation.
• Before acting in reliance on any information contained in this presentation, potential investors should conduct their own investigation and analysis in relation to the Plan and should check the accuracy, reliability and completeness of the information contained in this presentation and obtain independent and specific advice from appropriate professional advisers. This presentation does not purport to contain all the information that a prospective investor may require.
• Nothing in this presentation should be construed as financial product advice, whether personal or general, for the purposes of Section 766B of the Corporations Act. This presentation consists purely of factual information and does not involve or imply a recommendation or a statement of opinion in respect of whether to buy, sell or hold a financial product.
• This presentation and its contents have been made available in confidence and may not be reproduced or disclosed to third parties or made public in any way without the express written permission of the Company.
Disclaimer
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